Akhtarani (Migration)

[2022] AATA 4035

Akhtarani (Migration) [2022] AATA 4035 (15 November 2022)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANTS:  

Mr Hamid Akhtarani

Ms Zeynab Sharifnia

Mr Saman Akhtarani

Ms Yasamin Akhtarani

REPRESENTATIVE:  Dr Bhavisha Mehta (MARN: 1681165)

CASE NUMBER:  1935120

HOME AFFAIRS REFERENCE(S): BCC2017/3786900 BCC2017/3916144 BCC2017/3916158 BCC2019/4677137

MEMBER:Mary Sheargold

DATE:15 November 2022

PLACE OF DECISION:  Melbourne

DECISION:The Tribunal remits the applications for Business Skills (Residence) (Class DF) visas for reconsideration, with the direction that the first named applicant meets the following criteria for a Subclass 892 (State/Territory Sponsored Business Owner) visa:

·cl 892.211(1) of Schedule 2 to the Regulations.

Statement made on 15 November 2022 at 10:48am

CATCHWORDS
MIGRATION – Business Skills (Residence) (Class DF) visa – Subclass 892 (State/Territory Sponsored Business Owner) – qualifying business – evidence provided showed business has transaction history with one customer – misunderstanding of requirements – transaction history provided was with best customer, not only one – genuine commitment to establishing and maintaining business – decision under review remitted

LEGISLATION
Migration Act 1958 (Cth), ss 65, 134(10)
Migration Regulations 1994 (Cth), rr 1.03, 1.11, Schedule 2, cls 892.211(1), 892.221(a)

CASES
Ibrahim v MIAC [2009] FCA 1328
Shahpari v MIBP [2016] FCCA 513
Yang v MIBP [2014] FCCA 1576

statement of decision and reasons

application for review

1. This is an application for review of a decision made by a delegate of the Minister for Home Affairs on 4 December 2019 to refuse to grant the visa applicants Business Skills (Residence) (Class DF) visas under s 65 of the Migration Act 1958 (Cth) (the Act).

2. The applicants applied for the visas on 13 October 2017. At the time of application, Class DF contained four subclasses: Subclass 890 (Business Owner), Subclass 891 (Investor), Subclass 892 (State/Territory Business Owner) and Subclass 893 (State/Territory Sponsored Investor). The applicants in this case are seeking to satisfy the criteria for the grant of Subclass 892 (State/Territory Business Owner) visas, as set out in Part 892 of Schedule 2 to the Migration Regulations 1994 (Cth) (the Regulations). At least one member of the family unit must satisfy the primary criteria set out in Subdivision 892.2. The others need only to satisfy the secondary criteria set out in Subdivision 892.3.

3. The delegate in this case refused to grant the visas on the basis that the first named visa applicant did not satisfy the requirements of cl 892.211(1) of Schedule 2 to the Regulations because the main business nominated by the first named applicant in support of this application provided evidence of a transaction history with only one customer, and so did not, in the delegate’s view, meet the definition of ‘qualifying business’ as defined in r.1.03 of the Regulations, meaning he did not have an ownership interest in 1 or more actively operating main businesses in Australia for at least 2 years immediately before the application was made.

4. The applicants, including the third and fourth named minors, appeared before the Tribunal on 27 October 2022 to give evidence and present arguments.

5. The applicants were represented in relation to the review.  The representative attended the Tribunal hearing.

6. For the following reasons, the Tribunal has decided that the matter should be remitted for reconsideration.

   CONSIDERATION OF CLAIMS AND EVIDENCE

7. The issue in this case is whether the first named applicant meets the requirement of cl.892.211(1).

   Ownership interest in main business

8. Clause 892.211(1) requires that the applicant had an ownership interest in one or more actively operating main businesses in Australia for at least two years immediately before the visa application was made and continued to have that interest at the time the visa application was made. The applicant must continue to satisfy this requirement at the time of this decision: cl 892.221(a). No more than two businesses can be nominated for this purpose (reg 1.11(2)) and only one or both of the businesses relied on to meet the time of application criterion can be relied on to meet the time of decision criterion: Yang v Minister for Immigration and Border Protection [2014] FCCA 1576.

9. The business relied on by the applicant to satisfy these requirements is operated by Arshida Pty Ltd, a company registered by the first named applicant on 22 July 2015.  Accordingly, the Tribunal must consider the nature of the applicant’s interest in this business, whether the business was actively operating and whether it met the definition of ‘main business’ in the period commencing two years immediately prior to the date of application and as at the date of application. The Tribunal must also consider these issues as at the date of this decision and whether the applicant continues to satisfy cl 892.211(1).

   Does the applicant have an ownership interest in each business relied on at all relevant times?

10. An ‘ownership interest’, in relation to a business, means an interest in the business as:

    ·a shareholder in a company that carries on the business, or

    ·a partner in a partnership that carries on the business, or

    ·the sole proprietor of the business;

    including such an interest held indirectly through one or more interposed companies, partnerships or trusts (reg 1.03 of the Regulations and s 134(10) of the Act). Ownership for this purpossssssssqwase includes beneficial ownership if it is evidenced in accordance with the terms of reg 1.11A of the Regulations, set out in the attachment to this decision: reg 1.11A(1).

11. In order to meet cl 892.211(1) the Tribunal must be satisfied that the applicant had an interest of this kind in the relevant business or businesses both at the time of making that application and for the two years immediately before. In order to meet cl 892.221(a) the Tribunal must be satisfied that the applicant continues to satisfy this requirement at the time of this decision.

12. At the hearing, the first named applicant gave evidence confirming that Arshida Pty Ltd is his only Australian business and that he is the sole director and shareholder in the company.  This is confirmed by records provided from the Australian Securities and Investments Commission.  The first named applicant told the Tribunal that his family businesses in Iran have been involved in the silver jewellery trade, but on arriving in Australia after his brother, he found an opportunity to expand into the eyewear market via some associates of his brother.  Arshida has traded in all manner of accessories, including eyewear, sterling silver jewellery and costume jewellery, since it was incorporated.  The first named applicant stated that while the business is primarily focused on retail jewellery sales now, it has historically been involved in wholesaling and retailing of eyewear.

13. The first named applicant is the sole director, secretary and shareholder of Arshida Pty Ltd and has been since the company was registered on 22 July 2015.  Accordingly, the Tribunal is satisfied that the applicant did have and does have an ownership interest in the nominated business

    Was each business relied on actively operating at all relevant times?

14. In order to meet cl 892.211(1) the Tribunal must be satisfied that the relevant business or businesses were actively operating both at the time of making the visa application and during the two years immediately before. In order to meet cl 892.221(a) the applicant must continue to satisfy this requirement at the time of this decision.

15. The term ‘actively operating’ is not defined in the Act or Regulations. In considering whether this requirement is met, the Tribunal may consider whether the business exhibited activity of a ‘repetitive, continuous and permanent character’ at the relevant times, in which the business actively sought to generate business, in fact generated trade and custom and derived some financial gain for its activities in the relevant period: Shahpari v Minister for Immigration and Border Protection [2016] FCCA 513 at [71].

16. On its face, it is plain that Arshida Pty Ltd was actively operating throughout the period from its registration to the time the application was made, and indeed it has continued to trade and flourish since that time.  The plans to expand the business operations in the near future are well established.

17. The delegate was not satisfied that this business was actively operating for the 2 years prior to the application being made because evidence was provided regarding trade with only one customer in that time, Florentine Eyewear Pty Ltd.  The delegate expressed reservations about the relationship between the applicants and the owners of Florentine Eyewear.  The applicants rebutted that with statements regarding the arms-length nature of the relationship between the two companies.  At review, the Tribunal requested confirmation that there was no common familial or other relationships between Arshida and Florentine Eyewear that may cause the Tribunal to question that argued arms-length relationship.  The evidence received in the form of a current and historical company extract for Florentine Eyewear confirms the oral evidence provided by the first named applicant during the hearing and the Tribunal is satisfied that there is an arms-length relationship between the companies, and that they have traded on fair commercial terms.

18. Indeed, during the hearing, the first named applicant explained in a passionate level of detail his frustrations dealing with the senior managers within Florentine Eyewear Pty Ltd who would attempt to stonewall business transactions due to perceived jealousy regarding the willingness Florentine Eyewear’s directors showed to engage in trade with a foreign investor.  The first named applicant explained that it was this difficulty in dealing with managers within Florentine Eyewear that led him to recalibrate the focus of the accessories business back to the area he knew best, sterling silver jewellery.

19. The first named applicant gave evidence that he had misunderstood the requirements when the application was made in terms of demonstrating the trading activities of his business and had provided examples of invoices between his business and Florentine Eyewear because Florentine Eyewear was his best customer, not his only customer.  The Tribunal accepts the first named applicant’s evidence in this respect.

20. It was clear from the discussions between the Tribunal and the applicants that there was always a genuine commitment to establishing and maintaining a business in Australia, and that the first named applicant has utilised his business acumen to the best of his abilities to direct the business to the successful path it currently finds itself on.  All the evidence available at review establishes a strong enough pattern of trading activity and hands-on, daily efforts by the first named applicant to conclude that he was and is actively operating this business at all material times.

21. Accordingly, the Tribunal is satisfied that the nominated business was and is actively operating at all relevant points in time.

    Does each business relied on satisfy the definition of ‘main business’ at all relevant points in time?

22. In order to satisfy the requirements of cl 892.211(1), the business or businesses relied on by the applicant must meet the definition of ‘main business’ at the time of application and during the two years immediately before. Clause 892.221(a) requires that the applicant continues to satisfy this requirement at the time of decision. The term ‘main business’ is defined in reg 1.11 of the Regulations and is set out in full in the attachment to this decision. There are four elements to the definition, each of which must be satisfied for a business to be a main business.

23. Firstly, the applicant must have or have had an ownership interest in the business. In considering this issue, the ownership interest does not need to be continuous or exist at a particular time: Ibrahim v Minister for  Immigration and Citizenship [2009] FCA 1328 at [32], considering similarly worded criteria in cls 845.213 and 845.221. ‘Ownership interest’ is defined in s 134(10) of the Act: reg 1.03. If a beneficial interest is relied on for these purposes, certain evidentiary requirements must also be met: reg 1.11A. These provisions are set out in full in the attachment to this decision.

24. Secondly, the applicant must maintain or have maintained direct and continuous involvement in management of the business from day to day and in making decisions affecting the overall direction and performance of the business.

25. Thirdly, the value of the applicant’s ownership interest, or the total value of the ownership interests of the applicant and the applicant’s spouse or de facto partner, in the business must meet certain thresholds:

    ·if the business is operated by a publicly listed company, the value of the ownership interest must be at least 10% of the total value of the business;

    ·if the businesses is not operated by a publicly listed company and the annual turnover of the business is at least AUD400 000, the value of the ownership interest must be at least 30% of the total value of the business;

    ·If the business is not operated by a publicly listed company and the annual turnover of the business is less than AUD400 000; the value of the ownership interest must be at least 51% of the total value of the business.

26. Finally, the business must be a qualifying business. ‘Qualifying business’ is defined as an enterprise that is operated for the purpose of making profit through the provision of goods, services or goods and services (other than the provision of rental property) to the public, and is not operated primarily or substantially for the purpose of speculative or passive investment: reg 1.03.

27. As set out above, the Tribunal has been satisfied that from the registration of Arshida Pty Ltd to the present date, the first named applicant has occupied 100% ownership in Arshida Py Ltd and has been directly and continuously involved in the management of the business.  Because he is the sole shareholder, the Tribunal is satisfied that the value of his ownership interest in the business meets the required threshold of at least 51%.

28. In the Tribunal’s view, and for the reasons articulated above in the discussion regarding active operation of the business, the first named applicant’s business is clearly a qualifying business.  His business is an enterprise operated for the purpose of making profit through the wholesaling and retailing of eyewear and other accessories to the public.  There is no inference that the applicant’s business is a speculative or passive investment.

29. Accordingly, the Tribunal is satisfied that the nominated business does meet the definition of main business at all relevant points in time.

30. Given the findings above, the Tribunal is satisfied that cl 892.211(1) is met. The appropriate course is to remit the matter to the Minister to consider the remaining criteria for the visa, including in respect of the secondary applicants.  While the Tribunal is not obliged to expand its review beyond the criterion in dispute, the Tribunal notes that after detailed discussions with the applicants and their representative during the hearing, it is clear that the first named applicant continues to satisfy the requirements of cl.892.211 at the time of this decision.

    decision

31. The Tribunal remits the applications for Business Skills (Residence) (Class DF) visas for reconsideration, with the direction that the first named applicant meets the following criteria for a Subclass 892 visa:

    ·cl 892.211(1) of Schedule 2 to the Regulations.

    Mary Sheargold
    Member

    
    

    ATTACHMENT - LEGISLATION

    Migration Regulations 1994

    1.03Definitions

    In these Regulations, unless the contrary intention appears:

    …

    ownership interest has the meaning given to it in subsection 134(10) of the Act.

    …

    qualifying business means an enterprise that:

    (a)     is operated for the purpose of making profit through the provision of goods, services or goods and services (other than the provision of rental property) to the public; and

    (b)     is not operated primarily or substantially for the purpose of speculative or passive investment.

    …

    1.11Main business

    (1)For the purposes of these Regulations and subject to subregulation (2), a business is a main business in relation to an applicant for a visa if:

    (a)the applicant has, or has had, an ownership interest in the business; and

    (b)the applicant maintains, or has maintained, direct and continuous involvement in management of the business from day to day and in making decisions affecting the overall direction and performance of the business; and

    (c)the value of the applicant’s ownership interest, or the total value of the ownership interests of the applicant and the applicant’s spouse or de facto partner, in the business is or was:

    (i)if the business is operated by a publicly listed company—at least 10% of the total value of the business; or

    (ii)if:

    (A)the business is not operated by a publicly listed company; and

    (B)the annual turnover of the business is at least AUD400 000;

    at least 30% of the total value of the business; or

    (iii)if:

    (A)the business is not operated by a publicly listed company; and

    (B)the annual turnover of the business is less than AUD400 000;

    at least 51% of the total value of the business; and

    (d)the business is a qualifying business.

    (2)If an applicant has, or has had, an ownership interest in more than 1 qualifying business that would, except for this subregulation, be a main business in relation to the applicant, the applicant must not nominate more than 2 of those qualifying businesses as main businesses.

    1.11A Ownership for the purposes of certain Parts of Schedule 2

    (1)Subject to subregulation (4), for Parts 132, 188, 888, 890, 891, 892 and 893 of Schedule 2, ownership by an applicant, or the applicant’s spouse or de facto partner, of an asset, an eligible investment or an ownership interest, includes beneficial ownership only if the beneficial ownership is evidenced in accordance with subregulation (2).

    (2)To evidence beneficial ownership of an asset, eligible investment or ownership interest, the applicant must show to the Minister:

    (a)a trust instrument; or

    (b)a contract; or

    (c)any other document capable of being used to enforce the rights of the applicant, or the applicant’s spouse or de facto partner, as the case requires, in relation to the asset, eligible investment or ownership interest;

    stamped or registered by an appropriate authority under the law of the jurisdiction where the asset, eligible investment or ownership interest is located.

    (3)A document shown under subregulation (2) does not evidence beneficial ownership, for subregulation (1), for any period earlier than the date of registration or stamping by the appropriate authority.

    (4)Beneficial ownership is not required to be evidenced in accordance with subregulation (2) if the person who has legal ownership of the asset, eligible investment or ownership interest in relation to which the applicant, or the applicant’s spouse or de facto partner, has beneficial ownership:

    (a)is a dependent child of the applicant; and

    (b)made a combined application with the applicant; and

    (c)has not reached the age at which, in the jurisdiction where the asset, eligible investment or ownership interest is located, he or she can claim the benefits of ownership of the asset, eligible investment or ownership interest.

    Migration Act 1958

    134Cancellation of business visas

    ….

    (10)In this section:

    ….

    ownership interest, in relation to a business, means an interest in the business as:

    (a) a shareholder in a company that carries on the business; or

    (b) a partner in a partnership that carries on the business; or

    (c) the sole proprietor of the business;

    including such an interest held indirectly through one or more interposed companies, partnerships or trusts.